Financial Crime World

Guinea’s Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Prevention of Proliferation Financing (PPF) Regime: Key Findings and Recommendations

Introduction

The Guinea Mutual Evaluation Report highlights several key areas where the country needs to improve its AML, CFT, and PPF regime. The report identifies significant shortcomings in the country’s efforts to combat money laundering and terrorist financing.

Key Findings

Lack of Coordination

  • There is a lack of coordination between law enforcement agencies, judicial authorities, and other stakeholders in addressing money laundering and terrorist financing.
  • This lack of coordination hinders effective investigations and prosecutions of ML-related cases.

Ineffective Financial Intelligence System

  • The Financial Intelligence Unit (FIU) relies heavily on the judicial authorities for information, but few law enforcement agencies use financial intelligence when investigating predicate offenses.
  • This undermines the effectiveness of the FIU in detecting and preventing ML/TF activities.

Defective Cash Declaration System

  • The system for detecting and communicating false declarations or non-declaration of cash and bearer negotiable instruments is defective and almost dysfunctional.
  • This creates opportunities for individuals to launder money through cash transactions.

Inadequate Investigative Services and Courts

  • ML-related investigations and prosecutions are rare due to lack of prioritization, inadequate resources, and appropriate training.
  • This allows ML/TF activities to go unchecked, contributing to the country’s vulnerability to these threats.

Insufficient Confiscation of Proceeds

  • Confiscation of the proceeds and instrumentalities of crime is not a priority, and no ML/TF-related confiscation has been obtained.
  • This failure to confiscate illicit assets undermines the effectiveness of AML/CFT efforts.

No National Policy on Terrorism Financing Prevention

  • The country lacks an appropriate national policy and strategy to prevent terrorism and its financing.
  • This creates a vulnerability to terrorist financing, which can be exploited by terrorists.

Weak Contribution from Non-Bank Financial Institutions (DNFBPs)

  • DNFBPs contribute little to reporting activity and due diligence measures, which is a weak link in the AML/CFT chain in Guinea.
  • This lack of contribution undermines the effectiveness of AML/CFT efforts in detecting and preventing ML/TF activities.

Inadequate Bank Supervision

  • Bank supervision is well-structured, but other sub-sectors such as insurance, foreign exchange bureaus, microfinance institutions (MFIs), and electronic money issuers (EMIs) have inadequate risk-based approaches.
  • This creates opportunities for ML/TF activities to occur in these sub-sectors.

Limited Impact of Supervisory Measures

  • The impact of supervisory measures on the compliance of financial institutions remains limited due to lack of sanctions and inadequate resources.
  • This undermines the effectiveness of AML/CFT efforts in detecting and preventing ML/TF activities.
  • The country faces structural challenges and poor understanding of ML/TF risks linked to entities, hindering transparency in legal persons and arrangements.
  • This creates opportunities for ML/TF activities to occur through complex financial transactions.

Recommendations

  1. Establish a National Coordination Committee: Improve cooperation between law enforcement agencies and other stakeholders to address money laundering and terrorist financing effectively.
  2. Enhance the Financial Intelligence Unit (FIU): Collect, analyze, and disseminate financial intelligence more effectively to detect and prevent ML/TF activities.
  3. Implement Effective Measures to Prevent Cash-Related Crimes: Strengthen cash declaration systems and communicate false declarations or non-declaration of cash and bearer negotiable instruments more effectively.
  4. Strengthen Investigative Services and Courts: Prioritize ML-related investigations and prosecutions, provide adequate resources and training, and confiscate proceeds and instrumentalities of crime more effectively.
  5. Develop a National Policy on Terrorism Financing Prevention: Establish an appropriate national policy and strategy to prevent terrorism and its financing.
  6. Improve Reporting Activity and Due Diligence Measures by DNFBPs: Enhance the contribution of non-bank financial institutions (DNFBPs) to AML/CFT efforts by reporting activity and due diligence measures more effectively.
  7. Implement Risk-Based Approaches in Bank Supervision and Other Sub-Sectors: Establish risk-based approaches in bank supervision and other sub-sectors such as insurance, foreign exchange bureaus, microfinance institutions (MFIs), and electronic money issuers (EMIs) to detect and prevent ML/TF activities.
  8. Enhance Supervisory Measures: Improve the impact of supervisory measures on the compliance of financial institutions by establishing adequate sanctions and resources.
  9. Improve Transparency in Legal Persons and Arrangements: Address structural challenges and improve understanding of ML/TF risks linked to entities to enhance transparency in legal persons and arrangements.

By addressing these areas, Guinea can strengthen its AML/CFT regime and reduce the risks associated with money laundering and terrorist financing.